Times Co. plans T&G, Globe sale

The New York Times Co. Wednesday announced plans to sell the Telegram & Gazette and The Boston Globe, exiting the New England market to focus on its flagship publication.

The company said it had retained Evercore Partners to advise and manage the sale of the Telegram & Gazette, Telegram.com, The Boston Globe, Boston.com, BostonGlobe.com, and GlobeDirect, a direct mail marketing company

Shares of the Times Co. closed down 0.4 percent to $9.03. The announcement was made after the stock market closed.

The sale of its New England properties comes as newspapers nationally cope with a soft advertising market, a lingering recession and the migration of readers to digital platforms. The Times purchased the Globe in 1993 for $1.1 billion and paid $296 million for the T&G in 2000. Newspaper experts said the papers will likely fetch far lower prices than what the Times paid for them.

The Times is expected to seek a buyer in an auction, but said in a statement, “There can be no assurance that any transaction will take place.”

“The Boston Globe and the Worcester Telegram & Gazette are outstanding newspapers, and they and their related digital properties are well-managed leaders in their markets with real opportunities for future development,” said Mark Thompson, the Times’ president and chief executive officer.

“We are very proud of our association with the Globe and the Telegram & Gazette, but given the differences between these businesses and The New York Times, we believe that a sale is in the best long-term interests of these properties and the employees who work for them as well as in the best interests of our shareholders.”

The sale comes a little more than three years after the Times reaffirmed its commitment to the Massachusetts newspapers.

The company tried selling the Globe in 2009 saying it was a money-losing operation. But after a round of cost-cutting, the Times said in October 2009 it would retain the Globe.

Two months later, then-CEO Janet L. Robinson said that after a lengthy process of exploring various alternatives, the Telegram & Gazette and telegram.com “should remain a part of the company.”

In a letter to employees Wednesday, Mr. Thompson and Chairman Arthur Sulzberger Jr. said the sale of the New England Media Group would allow the Times to focus on its core brand.

“This was not an easy decision as the New England Media Group has, for many years, brought tremendous value to our company,” the men said in a statement.

Revenues at the group fell 0.8 percent last year, to about $395 million.

The Times has sold several properties in recent years, including a stake in the Boston Red Sox, a group of regional newspapers and the website About.com.

It reported year-end net income of $133 million, or 87 cents a share, compared with a $39.7 million net loss, or 26 cents a share, in the previous year.

A sale would give the Times more capital to put toward international expansion, one of the company’s goals, said Rick Edmonds, media business analyst at the Poynter Institute in Florida.

“Other papers besides the Times are more of a distraction than something that benefits the company these days,” he said. “It fits with the strategy that (CEO) Mark Thompson has been conducting. We’re seeing part of that right now.”

Mr. Thompson, former head of the British Broadcasting Corp., became president and chief executive of the Times in November. T&G Publisher Bruce Gaultney said the award-winning, dedicated staff of 320 full and part-time employees will continue to provide a high-quality newspaper and website.

“The T&G has a reputation as an outstanding newspaper,” said Mr. Gaultney. “Our history of providing that high quality news goes back many years and I certainly expect that to continue in the future.”

He declined comment on whether the T&G was profitable in 2012. Times spokeswoman Abbe Serphos said the company does not disclose the individual profitability of the New England Media Group or its respective properties

It’s unclear whether the Times will sell the Globe and the T&G separately or as a package.

Asked how different parts of the New England Media Group might change hands, Ms. Serphos said, “We will do whatever makes the most sense for the company and its shareholders in order to maximize value to The New York Times Company.”

She said there is no time frame for a potential sale. In a note to employees Wednesday, Globe Publisher Christopher M. Mayer said the process will take several months.

A local investment group that had interest in the T&G in 2009 hasn’t been contacted by the Times, some of its principals said. And even if the Times did reach out, time and circumstances have changed, they said.

Ralph D. Crowley Jr., president and chief executive officer of Polar Beverages Co., and Harry T. Whitin, retired editor of the T&G, each said they were “worn out” from their 2009 efforts to purchase the paper.

Since that effort, some of the presses are no longer in use at the T&G printing plant in Millbury. In addition, some back-office operations including information technology, human resources and accounting, have been interwoven into the Globe.

“I’m watching from the sidelines,” Mr. Crowley said last night. “And nobody has nursed me off.”

He said his interest was solely in the T&G and not the Globe. But so many synergies now connect the two newspapers “how do you get the T&G as a stand-alone?”

Mr. Whitin said “never say never,” but said he and Mr. Crowley were exhausted by their unsuccessful bid.

“It’s a different environment today,” Mr. Whitin said. “Untangling the Telegram & Gazette and Globe operations would be far more difficult today.”

One potential bidder for the New England papers is Massachusetts investor Aaron Kushner, who has expressed interest in the Globe and T&G in the past. Last year Mr. Kushner bought the Orange County Register in California, where he is beefing up the staff and expanding print sections. He could not be reached for comment Wednesday.

Billionaire Warren Buffett has also been buying local newspapers. The T&G, Mr. Edmonds said, might fit Mr. Buffett’s criteria, while the Globe, a much larger paper, would not.

Evercore Partners, the firm hired to sell the New England Media Group, has handled other sales of media entities in the past, including the $55 million sale of the Philadelphia Media Network last year and the sale of BusinessWeek to Bloomberg L.P. in 2009.

Mr. Whitin said he could see the New England Media Group properties potentially selling for $100 million. Mr. Whitin, who retired as editor in 2009, said the Times is a good owner of the T&G when it comes to their commitment to journalism.

But he said the economic circumstances and an uncertain future for all print media make it a very difficult environment.

For the six months that ended in September, the T&G reported total paid or verified print and digital circulation of the Telegram & Gazette and its products was 78,511 Sunday and 72,106 daily, both down 5.7 percent compared to the same six-month period in 2011. The T&G also said paid circulation was up 1.9 percent Sunday and 3.2 percent daily.

Paid circulation counts individuals who have purchased a subscription or copy in print or digital form; verified circulation includes free copies and group purchases and does not have to be paid.

The newspaper continues to be the dominant media company in Central Massachusetts, Mr. Whitin said.